CHAPTER 10 The Choice of Law Process

• Date: 07 April 2025

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CH AP TER 10

THE CHOICE OF LAW

PROCESS

A. INTRODUCTION

As explained in Chapter 1, the second central question private inter-

national law seeks to answer is what law the court will use to resolve a

dispute. Implicit in this question is that the court does not always simply

use its own law, the law of the forum. This may at f‌irst seem surprising,

since we are so familiar with courts resolving cases according to the law

of the forum, and indeed this is what happens in the vast majority of

cases. But sometimes the court resolves a dispute using the law of some

other legal system. The choice of law process explains how the court

determines what legal system applies to a particular dispute.

B. THE R ATIONALE FOR CHOICE OF LAW

A preliminary question is why a court would be willing to resolve a

dispute using a foreign law. Laws are in essence highly territorial and

so it might seem problematic for a court in Ontario to resolve a dispute

using German law rather than Ontario law. Some might even consider

the application of German law to violate Ontario’s sovereignty. Through-

out the history of the conf‌lict of laws, the leading preoccupation of its

scholars has been the issue of choice of law, and over time three leading

theories emerged to attempt to explain why the court would resolve a

dispute using foreign law.

CONFLICT OF LAWS

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The f‌irst theory is the theory of comity. It posits that the courts of

one country apply the laws of another country as a courtesy to that coun-

try and in the hope that its courts will reciprocate. In a sense, resolv-

ing all disputes using the law of the forum would be discourteous or

rude.1 There are signif‌icant f‌laws in this theory. The common law cases

rarely analyze the extent to which the foreign legal system does or might

reciprocate, casting doubt on the reciprocity aspect. In addition, courts

have resolved disputes by applying the foreign law of an unfriendly or

enemy country, for example in times of war,2 casting doubt on the cour-

tesy aspect.

In recent years Canadian appellate courts have placed considerable

emphasis on notions of comity.3 But it is important to be clear that in

doing so they are not using comity in the sense described above and are

not arming the concept as a theory which would explain the use of for-

eign law to resolve disputes.4 Rather, the courts are using comity in the

way it was subsequently def‌ined in Hilton v Guyot, in which the United

States Supreme Court stated “‘[c]omity,’ in the legal sense, is neither a

matter of absolute obligation, on the one hand, nor of mere courtesy and

good will, upon the other.”5

The second theory is the theory of vested rights. It asserts that a

person, by acting in a particular country, acquires rights under the law

of that country. These rights must then be treated as having vested in

the person so that all other countries must give eect to them. Univer-

sal application of the law of the forum would deny these vested rights.6

The vested rights theory was widely adopted by common law courts in

1 Leading advocates of this theory are Ulrich Huber, “Of the Conf‌lict of Diverse

Laws in Diverse Governments (de Conf‌lictu Legum) (1689)” in Ernest G Loren-

zen, Selected Articles on the Conf‌lict of Laws (New Haven, CT: Yale University

Press, 1947) at 164; and Melville M Bigelow, Story’s Commentaries on the Conf‌lict

of Laws, 8th ed (Boston: Little, Brown, 1883) at 33–34.

2 Otto Kahn-Freund, “General Problems of Private International Law” (1974) 143

Recueil des Cours 139 at 464. See also Perry Dane, “Vested Rights, ‘Vestedness,’

and Choice of Law” (1987) 96 Yale Law Journal 1191 at 1213–14.

3 As a leading example, see Morguard Investments Ltd v De Savoye, [1990] 3 SCR

1077 at 1095–96.

4 In Davies v Collins, 2011 NSCA 79 at para 33, the court noted that “[t]he

Supreme Court’s resurrection of comity has not escaped criticism which argues

the diculty, if not irrelevance of applying ‘comity’ to choice of law questions in

a private setting.” See Peter Kincaid, “Jensen v. Tolofson and the Revolution in Tort

Choice of Law” (1995) 74 Canadian Bar Review 537 at 541–45.

5 159 US 113 at 163–64 (1895).

6 Albert Venn Dicey, A Digest of the Law of England with Reference to the Conf‌lict of

Laws (London: Stevens & Sons, 1896) at 22; Joseph Beale, A Selection of Cases on

the Conf‌lict of Laws, vol 3 (Cambridge: Harvard University Press, 1902) at 517.